Russel Metals (RUS) AI Stock Analysis

• Market Cap: C$2.47B
• Dividend Yield: 3.88%
• Average Volume (3M): 161.96K
• Price to Earnings (P/E): 15.1
• Beta (1Y): 1.13
• Revenue Growth: 8.15%
• EPS Growth: -3.57%
• Country: CA
• Employees: 3,970
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.63
• Shares Outstanding: 56,000,000
• 10 Day Avg. Volume: 174,071
• 30 Day Avg. Volume: 161,958
• PEG Ratio: -0.42
• Price to Book (P/B): 1.49
• Price to Sales (P/S): 0.58
• P/FCF Ratio: 9.77
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$49.25
• Price Target Upside: 11.65% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: C$46.00 ▲(4.28% Upside)

Russel Metals' strong earnings performance and strategic expansion efforts are the most significant factors driving the score. While financial performance shows some challenges, the company's technical indicators and valuation are favorable. The positive sentiment from the earnings call further supports the stock's outlook.

Positive Factors

Revenue and EBITDA Growth

The consistent growth in revenue and EBITDA indicates strong operational performance and effective management strategies, supporting long-term business sustainability.

U.S. Platform Expansion

Expansion in the U.S. market diversifies revenue streams and reduces dependency on Canadian operations, enhancing long-term growth prospects.

Improved Credit Rating

An improved credit rating enhances financial flexibility and lowers borrowing costs, supporting future investments and stability.

Negative Factors

Declining Profit Margins

Reduced margins can impact long-term profitability, suggesting the need for cost management and efficiency improvements to sustain earnings.

Weakening Cash Flow

Decreased cash flow may limit the company's ability to fund new projects or return capital to shareholders, affecting long-term growth capacity.

Increased Operating Costs

Rising operating costs can strain profit margins and require strategic adjustments to maintain competitiveness and financial health.

Russel Metals Business Overview & Revenue Model

Company Description

Russel Metals Inc. operates as a metal distribution company in North America. The company operates through three segments: Metals Service Centers, Energy Products, and Steel Distributors. The Metal Service Centers segment sells plates, flat rolled carbon, stainless steel, aluminum, and other non-ferrous specialty metal products, as well as general line steel products, such as plates, structural shapes, bars, sheets, pipes, tubing, and hollow structural steel tubing. It also offers services, including fiber tube and flat laser processing; multi-dimensional press braking and rolling; shearing, slitting, and cutting to length; laser, oxy-fuel, and plasma cutting; stretcher and traditional leveling; beam drilling, notching, coping, and tee-splitting; saw cutting; edge trimming; and cambering. This segment serves customers in industries, such as machinery and equipment manufacturing, construction, ship building, and natural resources. The Energy Products segment distributes flanges, valves, fittings, and tubular goods primarily to energy industry. The Steel Distributors segment operates as a steel distributor for steel service centers and large equipment manufactures. Russel Metals Inc. was incorporated in 1929 and is headquartered in Mississauga, Canada.

How the Company Makes Money

Russel Metals generates revenue primarily through the sale of metal products and related processing services. Its revenue model is based on a combination of product sales and value-added services, such as cutting, drilling, and other forms of metal processing that enhance the usability of raw materials for its customers. The key revenue streams include sales from the Metals Service Centers segment, which provides a variety of metal products to numerous industries, and the Energy Sector segment, which supplies specialized products to the oil and gas industry. The company also benefits from significant partnerships with manufacturers and suppliers, which help secure competitive pricing and reliable product availability. Additionally, economic factors such as demand fluctuations in construction and manufacturing sectors also play a crucial role in influencing the company's earnings.

Russel Metals Financial Statement Overview

Summary

Russel Metals shows stable revenue with slight growth, but declining gross and net profit margins indicate cost pressures and limited profitability. The balance sheet is strong with low leverage, but cash flow generation has weakened, raising concerns about future investments.

Income Statement

Russel Metals shows a stable revenue base with a slight growth in the TTM period. However, the gross profit margin has decreased compared to previous years, indicating potential cost pressures. The net profit margin is relatively low, suggesting limited profitability. The EBIT and EBITDA margins have also declined, reflecting reduced operational efficiency.

Balance Sheet

The company maintains a healthy debt-to-equity ratio, indicating a conservative approach to leverage. Return on equity has decreased, suggesting reduced profitability for shareholders. The equity ratio remains stable, showing a balanced capital structure.

Cash Flow

The free cash flow has significantly decreased in the TTM period, raising concerns about cash generation. The operating cash flow to net income ratio is moderate, indicating adequate cash conversion. However, the free cash flow to net income ratio has declined, suggesting potential challenges in maintaining cash reserves.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.59B	4.26B	4.51B	5.07B	4.21B	2.69B
Gross Profit	868.60M	889.90M	956.50M	1.13B	1.21B	518.70M
EBITDA	334.30M	315.50M	428.20M	580.40M	657.90M	125.20M
Net Income	165.30M	161.00M	266.70M	371.90M	432.20M	24.50M
Balance Sheet
Total Assets	2.62B	2.35B	2.57B	2.51B	2.31B	1.60B
Cash, Cash Equivalents and Short-Term Investments	211.60M	45.60M	629.20M	363.00M	133.10M	26.30M
Total Debt	469.70M	196.80M	422.50M	422.90M	404.30M	399.40M
Total Liabilities	997.70M	688.30M	930.20M	947.60M	1.07B	731.60M
Stockholders Equity	1.63B	1.66B	1.64B	1.56B	1.25B	864.70M
Cash Flow
Free Cash Flow	123.00M	253.70M	389.00M	318.40M	275.70M	346.10M
Operating Cash Flow	204.20M	343.90M	461.70M	359.90M	304.50M	371.00M
Investing Cash Flow	-185.50M	-417.70M	-5.30M	-6.50M	-107.20M	-27.30M
Financing Cash Flow	-47.80M	-537.90M	-184.90M	-139.10M	-93.50M	-327.10M

Russel Metals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 44.11
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RUS, the sentiment is Positive. The current price of 44.11 is above the 20-day moving average (MA) of 42.36, above the 50-day MA of 41.27, and above the 200-day MA of 40.72, indicating a bullish trend. The MACD of 0.96 indicates Negative momentum. The RSI at 72.49 is Negative, neither overbought nor oversold. The STOCH value of 77.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:RUS.

Russel Metals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTT	78 Outperform	C$9.76B	18.78	19.66%	1.58%	1.32%	24.27%
MTL	74 Outperform	C$1.55B	14.86	9.33%	5.21%	5.53%	-21.87%
WJX	73 Outperform	C$593.78M	12.89	8.84%	5.09%	3.71%	-12.70%
RUS	73 Outperform	C$2.47B	15.09	10.04%	3.88%	8.15%	-3.57%
TIH	69 Neutral	C$13.56B	27.37	16.34%	1.25%	2.97%	-0.80%
ARE	65 Neutral	C$2.00B	242.19	0.92%	2.38%	25.68%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Russel Metals Corporate Events

Russel Metals Reports Q3 2025 Results and Strategic Expansion

Russel Metals reported a revenue of $1.2 billion and an EBITDA of $75 million for the third quarter of 2025, reflecting a steady performance with a year-to-date annualized return on capital of 16%. The company announced strategic initiatives, including the acquisition of seven service center locations from Kloeckner Metals Corporation, which will enhance its U.S. market footprint and increase revenue contribution from U.S. operations to over 50%. This acquisition aligns with Russel Metals’ strategy to optimize its operations and expand its market reach, potentially benefiting stakeholders through increased efficiency and market share.

Russel Metals Reports Q3 2025 Results and Strategic Expansion

Russel Metals Inc. reported its third-quarter 2025 financial results, highlighting revenues of $1.2 billion and an EBITDA of $75 million. The company announced strategic initiatives, including the acquisition of seven service center locations from Kloeckner Metals Corporation, expected to boost annual revenues by approximately US$500 million and increase the U.S. revenue contribution to over 50%. Additionally, Russel Metals is undertaking business improvement initiatives in Western Canada, including location rationalization and property sales, to enhance operational efficiency.

Russel Metals Expands US Presence with Kloeckner Acquisition

Russel Metals Inc. has announced an agreement to acquire seven service center locations from Kloeckner Metals Corporation for approximately US$118.6 million. This acquisition is expected to enhance Russel’s geographic footprint in the US South and Midwest, aligning with its long-term growth strategy. The transaction will increase Russel’s revenue base in the US to over 50% and is anticipated to provide operational benefits through improved inventory management and facility upgrades. The deal is expected to close by Q4 2025 or Q1 2026, subject to customary conditions.

Russel Metals Streamlines Western Canadian Operations for Efficiency

Russel Metals Inc. has announced rationalization initiatives in its Western Canadian operations to reduce excess capacity and improve operational efficiency. These initiatives include selling real estate in Delta and Saskatoon, closing the Delta location, and relocating equipment, aiming for a cumulative invested capital reduction of approximately $100 million, enhancing the company’s financial position and operational focus.